Ongoing IP litigations affected smartphone business: Motorola Mobility

Motorola Mobility Holdings which is looking at a merger
with Google announced that the ongoing Intellectual Property (IP) litigations
in the mobile industry have affected its smartphone business.

Motorola Mobility Holdings now estimates sales of $3.4
billion with modest profitability on a non-GAAP basis. These estimates
include shipments of approximately 10.5 million mobile devices, of which
approximately 5.3 million were smartphones.

Motorola Mobility’s fourth-quarter results were impacted
by the increased competitive environment in the mobile device business and
higher legal costs associated with ongoing Intellectual Property (IP)
litigations.  The company estimates sales of $900 million for the Home
business in the fourth-quarter,” Motorola said in a press release.

Recently, Economist said that
the frenzy of smart-phone litigation could last for years.

In March Apple sued HTC, a Taiwanese maker of
smart-phones, which responded in kind a couple of months later. Earlier this
month it was Microsoft’s turn to file a lawsuit against Motorola, which is
likely to retaliate soon. And Oracle, a maker of business software, has sued
Google directly, albeit over a different issue, concerning how Android uses
Java, a programming language.

Some expect Apple and Microsoft to sue Google. Yet this
is unlikely, because the online giant will be hard to pin down. Google does not
earn any money with Android, which makes it difficult to calculate any
potential damage awards and patent royalties, according to Economist.

The combatants have deep pockets and much to lose. Google
is bounding ahead: Android now runs 32 percent of smart-phones sold in America,
whereas Apple’s iPhone has only 25 percent of the market and the BlackBerry has
26 percent, according to Nielsen, a market research firm.

Similarly, Nokia, which has already lost ground to Apple,
cannot afford to see its intellectual property devalued. Should Nokia prevail,
Apple may be slapped with $1 billion or so in licensing fees, estimates
Christopher White of Bristol York, an investment bank.


According to a press release from Motorola Mobility, it
will issue its fourth-quarter 2011 earnings results at approximately 3:00 p.m.
U.S. Central Time on Thursday, January 26, 2012. 

As previously announced on August 15, 2011, Motorola
Mobility and Google entered into a definitive agreement for Google to acquire
Motorola Mobility for $40.00 per share in cash, or a total of approximately
$12.5 billion. 

On November 7, 2011, Motorola Mobility stockholders voted
overwhelmingly to approve the proposed merger with Google at the Company’s
Special Meeting of Stockholders.

The company continues to work closely with Google to
complete the proposed acquisition of Motorola Mobility as expeditiously as
possible. The company notes that the transaction remains subject to
various closing conditions, and currently expects the transaction to close in
early 2012 once all conditions have been satisfied. The company reminds
stockholders that it is possible that the failure to timely meet such
conditions or other factors outside of the company’s control could delay or
prevent completion of the transaction altogether.

By Team
[email protected]